Houston, Texas-based Targa Resources Corp. (TRGP) owns, operates, acquires, and develops a portfolio of complementary domestic midstream infrastructure assets in North America. With a market cap of approximately $38.8 billion, Targa Resources operates through Gathering and Processing and Logistics and Transportation segments. Companies worth $10 billion or more are generally described as “large-cap stocks.” Targa fits this bill perfectly. Given the company’s strong presence and influence in the energy sec ...

Targa Resources Corp. (NYSE:TRGP) ranks among the best energy stocks with huge upside potential. On November 18, RBC Capital lifted its price target for Targa Resources Corp. (NYSE:TRGP) to $213 from $208, while maintaining an Outperform rating following the company’s third-quarter 2025 results. The firm observed that Targa Resources Corp. (NYSE:TRGP) displayed robust quarterly performance and expects the company to meet the upper end of its 2025 adjusted EBITDA guidance range, which RBC thinks could be mo ...

Core Insights - The oil market is currently seeking new catalysts after a stagnant month, with geopolitical tensions failing to impact prices significantly [1][9] Price Forecasts - Analysts predict an average price of $62 per barrel for 2026, a decrease of $10 from earlier forecasts [3] - The IEA anticipates a significant oversupply of 4.2 million barrels per day (b/d) in 2026, while conservative estimates suggest a stock-build of 0.5 million b/d [3] Market Dynamics - US shale output is expected to decline next year, with WTI projected to average $59 per barrel, which is $3-4 below the breakeven cost for new Permian wells, potentially stabilizing prices [4] - High freight costs have limited the influx of Atlantic Basin oil into Asia, but a negative Brent-Dubai EFS spread indicates that easing freight costs may soon change this [4] Market Movements - Chevron is expanding its operations by entering two oil and gas exploration blocks in Nigeria, covering 2,000 km² [6] - Targa Resources has agreed to acquire Stakeholder Midstream for $1.25 billion, enhancing its natural gas processing capabilities [6] - BP has fully restarted its Olympic Pipeline system after a month-long halt due to a leak [7] - ExxonMobil is considering acquiring Lukoil's 75% stake in the West Qurna-2 project in Iraq [7] Recent Market Activity - November was characterized by low volatility, with ICE Brent trading within a narrow range of $62.48 to $65.16 [9] - The OPEC+ meeting met market expectations, and attention is now focused on diplomatic efforts between Moscow and Kyiv that could influence future market conditions [9]

Core Insights - Targa Resources has agreed to acquire Stakeholder Midstream for $1.25 billion in cash, enhancing its operations in the Permian Basin [1][2] - The acquisition is expected to close in the first quarter of 2026, pending regulatory approval [3] Company Overview - Stakeholder Midstream provides natural gas gathering, treating, processing services, and crude oil gathering and storage in the Permian Basin, operating approximately 480 miles (772 km) of natural gas pipelines [1][2] - The company has a daily cryogenic natural gas processing and sour treating capacity of around 180 million cubic feet per day [1] Financial Aspects - Stakeholder's assets are supported by long-term, fee-based contracts across approximately 170,000 dedicated acres, with low decline rates ensuring a stable volume profile [2] - Targa anticipates that Stakeholder will contribute around $200 million in annual free cash flow with minimal capital expenditure requirements [4] Strategic Implications - Targa's CEO highlighted that the acquisition is a strategic move to create shareholder value, supported by a stable to modestly growing volume profile and minimal capital needs [3][4] - The company plans to finance the acquisition using available liquidity, including cash on hand and its existing $3.5 billion revolving credit facility, with a limited impact on its leverage ratio [5] Advisory Roles - RBC Capital Markets is acting as the financial advisor to Targa, while Jefferies serves as the exclusive financial advisor to Stakeholder [5][6]

Natural gas pipeline operator Targa Resources reached a deal to buy smaller rival Stakeholder Midstream for $1.25 billion in cash https://t.co/rBiQJM2Eek ...

Core Insights - Targa Resources Corp. (TRGP) is a prominent U.S. midstream energy infrastructure company with a market cap of $36.6 billion, primarily involved in the gathering, compressing, treating, processing, and transporting of natural gas and natural gas liquids (NGLs) [1] Stock Performance - TRGP shares have underperformed the broader market, declining 12.2% over the past 52 weeks, while the S&P 500 Index has gained 14.5%. Year-to-date, TRGP is down 4.4%, compared to a 16.5% rise in the S&P 500 [2] - The stock has also underperformed the Energy Select Sector SPDR Fund (XLE), which saw a 3.8% drop over the past 52 weeks and a 5.4% gain year-to-date [3] Performance Analysis - The decline in TRGP's stock price is attributed to weaker-than-expected quarterly performance, concerns regarding rising infrastructure capacity for NGLs, slower growth in upstream production, and market caution on oil prices [4] Earnings Forecast - For the fiscal year ending December 2025, analysts project Targa's EPS to grow 47% year-over-year to $8.44. The company's earnings surprise history is mixed, with one beat and three misses in the last four quarters [5] Analyst Ratings - Among 22 analysts covering TRGP, the consensus rating is a "Strong Buy," with 18 recommending "Strong Buy," one advising "Moderate Buy," and three maintaining a "Hold" rating [5] - The consensus rating has become slightly more bullish compared to two months ago, when there were 17 "Strong Buy" ratings [6] Price Targets - J.P. Morgan analyst Jeremy Tonet reaffirmed an "Overweight" rating on TRGP, slightly increasing the price target to $215 from $214. The mean price target of $204.59 indicates a potential upside of 19.9% from current levels, while the highest price target of $261 suggests a possible rise of up to 53% [6]

Core Insights - The midstream/MLP earnings season for the third quarter saw mostly in-line results, with expectations for a softer quarter leading to moderated estimates [1][9] - Notable announcements included acquisitions, data center deals, and plans for dividend increases, indicating robust growth opportunities in energy infrastructure, particularly for natural gas [9] Company Summaries - **MPLX (MPLX)**: Reported in-line results with $100 million in buybacks; management targets mid-single-digit EBITDA growth and 12.5% distribution growth for the next few years [2] - **Targa Resources (TRGP)**: Adjusted EBITDA exceeded consensus; expects a 25% increase in quarterly dividend to $1.25 per share by May 2026 and at least 10% growth in Permian volumes for 2025 [3] - **DT Midstream (DTM)**: Beat-and-raise quarter with a $50 million increase in 2025 adjusted EBITDA guidance to $1.13 billion; reaffirmed 2026 adjusted EBITDA outlook [4] - **Western Midstream (WES)**: Results exceeded expectations; anticipates ending the year at the high end of 2025 adjusted EBITDA guidance [5] - **Enterprise Products Partners (EPD)**: Results fell short of consensus; increased repurchase authorization to $5 billion and raised 2025 organic growth capex guidance to ~$4.5 billion [6] - **Williams (WMB)**: Announced in-line results and increased the Socrates power project budget to $2 billion; focused on investment in Woodside's Louisiana LNG [7] - **Energy Transfer (ET)**: Results fell short of estimates; expects full-year adjusted EBITDA below guidance range but highlighted growth opportunities in natural gas and data centers [8] - **Sunoco (SUN)**: In-line quarter overshadowed by Parkland integration; expects leverage below 4x within 12 months and over $250 million in synergies [10] - **Plains All American (PAA/PAGP)**: In-line results with acquisition of remaining interest in EPIC; expects mid-teens returns and a 2026 EBITDA multiple of 10x [11] - **Kinder Morgan (KMI)**: In-line results; pursuing $10 billion in potential projects primarily around natural gas [12] - **TC Energy (TRP CN)**: In-line results; expects 6%-8% year-over-year adjusted EBITDA growth in 2026 [13] - **Enbridge (ENB CN)**: In-line results; reaffirmed 2025 guidance and sanctioned $3 billion of projects [14] - **Cheniere Energy (LNG)**: Adjusted EBITDA below consensus; raised distributable cash flow guidance midpoint by $400 million to $5 billion [15] - **ONEOK (OKE)**: Slightly above consensus results; on pace to realize $250 million in synergies in 2025 [16] - **Pembina (PPL CN)**: In-line results; narrowed 2025 guidance range and announced a 20-year agreement with Petronas [17] Outlook and Trends - Investors should watch for guidance from companies like Kinder Morgan, Pembina, and Enbridge in December for 2026 [18] - A cautious oil outlook may contribute to uncertainty around 2026, but several companies expressed constructive comments regarding growth [19] - The Alerian MLP Infrastructure Index (AMZI) and Alerian Midstream Energy Select Index (AMEI) were yielding 8.0% and 5.7%, respectively, indicating strong dividend income potential [19]

Group 1: Targa Resources - Targa Resources reported a solid third-quarter performance driven by volume growth in the gathering and processing segment, and plans to meet the high end of the previous fiscal 2025 adjusted EBITDA guidance [3] - The company bought back approximately $156 million of stock during the quarter and announced a 25% dividend increase for 2026, which is expected to be viewed positively by investors [3] Group 2: Bio-Techne - Bio-Techne reported first-quarter 2026 revenue of $286.6 million, down 1% year over year, and flat adjusted earnings of $0.42 compared to the same quarter in 2025 [5] - The company faced headwinds in its GMP proteins business and funding delays for emerging biotech customers, leading to results below expectations [5] - A Buy rating is maintained with a price target of $75, reflecting the long-term potential of the company's diversified life science product portfolio [6] Group 3: McDonald's - McDonald's reported U.S. comparable sales growth of 2.4%, slightly below expectations, with earnings falling short due to heavy marketing investments [7] - The company anticipates U.S. comps to accelerate in the fourth quarter, driven by easier comparisons from last year's food safety incident and promotions [8] - A price target of $315 is set, but the company remains cautious due to challenges in consumer transactions and a bifurcated consumer base [8] Group 4: Docebo - Docebo is initiated with an Outperform rating and a price target of $35, as it has outpaced the broader LMS market by displacing legacy vendors and moving upmarket [9] - The company is expected to benefit from its push into the public sector after achieving FedRAMP status in April 2025 [10] Group 5: Marriott International - Marriott International's third-quarter results were a surprise positive, while the fourth-quarter guidance is considered neutral/slightly positive, reflecting macro uncertainty [11] - The preliminary outlook for 2026 indicates similar growth compared to 2025, suggesting an attractive growth path for the lodging sector [11] - A Neutral rating is maintained with a price target of $297, indicating a balanced risk/reward scenario [11] Group 6: Snowflake - Snowflake's annual developer and product conference highlighted its evolution from a "Data Cloud" to an "Enterprise Intelligence Cloud," focusing on helping customers build and reason with their data [12] - Key product announcements included the launch of Snowflake Intelligence and expanded AI capabilities, which are expected to drive future growth [13][14] - A price target of $280 is set, reflecting the company's strategic direction and product enhancements [15]

Group 1 - BMO Capital analyst Ameet Thakkar raised the price target on Targa Resources (TRGP) to $196 from $185, maintaining an Outperform rating on the shares [1] - The company's Q3 results indicate resilience to lower rig counts and oil prices, which is a positive sign for investors [1] - Expectations for FY26 double-digit volumetric growth and confidence in FY27 may enhance investor sentiment despite challenges in crude/NGL pricing [1]

Summary of the Conference Call on North American Midstream & Renewable Energy Infrastructure Industry Overview - The report focuses on the North American midstream sector, particularly how crude oil prices, specifically WTI (West Texas Intermediate), influence midstream stocks performance [1][2]. Key Insights - A quantitative analysis was conducted to understand the historical relationship between WTI prices and individual midstream stocks, aiming to prepare investors for potential near-term oil price declines [9][10]. - The report indicates that midstream stocks exhibit negative convexity to oil prices, meaning they tend to decline more sharply when WTI prices fall than they rise when prices increase [10]. - Current market conditions show that WTI has decreased by 24% since its recent peak in January 2025, which is in the $60 price band, a scenario that correlates with higher risks for midstream stocks [10]. Investment Recommendations - The report suggests a cautious approach, recommending to consider long positions in specific midstream stocks such as TRGP (Overweight), OKE (Overweight), WBI (Equal-weight), and PAA (Equal-weight) if WTI falls below $55 per barrel [10][12][15]. - The valuation of these stocks appears inexpensive, but a more aggressive capital allocation is advised only if WTI drops to the $50-$55 range [12][15]. Market Dynamics - The report highlights that the potential for a global oil market oversupply could lead to further downside risks for oil-levered midstream equities [12]. - Despite the current lag in performance of oil-levered midstream equities during recent down days for crude oil, the long-term contracted nature of most midstream companies provides cash flow resiliency and limits funding risks [12]. Correlation Analysis - The report includes various exhibits showing the correlation between WTI prices and midstream companies over the years, indicating that correlations tend to be higher during periods of significant price movements [16][17]. - Historical data from 2014 to 2025 shows varying degrees of correlation between WTI and midstream stocks, with a notable increase in correlation during downturns [17]. Conclusion - The North American midstream sector is currently viewed as attractive, but investors are advised to remain patient and strategic in their approach, particularly in light of potential oil price corrections and the associated risks for midstream equities [8][12].